1. 1 Doing Business in the Gulf Region First Annual Global Employers’ Summit Bahrain 2015 Rabah Al-Rabah Kuwait Chamber of Commerce and Indus try

2. 2 Gulf region is the bright spot in the MENA region with:  The largest economy based on huge oil, gas & minerals endowments.  Political stability.  Fair judiciary system.  Unique strategic location.  Solid financial fundamentals.  Modern infrastructure.  Visionary governments.  Experienced solvent private sector.

3. 3 1- Economic Fundamentals GCC Region is the largest 12 th economy in the world with:  GDP of more than 1.5 trillion dollar of 2014.  High Per capita income (average $ 31.9 thousands).  Positive GDP growth rates in real terms for 2015, inflation rate not exceeds 3.5% in all members, and a pegged exchange rate.

4. 4  33% of world proven crude oil reserves and 25% of World gas reserves - 2014.  International trade of 1.5 trillion dollar - 2014.  sovereign wealth funds of $ 2.3 trillion.  From the top 100 listed companies in MENA region in terms of market value, 84% are GCC’s companies (Estimation of 2014) Source: IMF, OPEC, Middle East Economic Digest, International Trade Center, Sovereign Wealth Funds institute, and U.S Energy administration

5. 5  The market has 51.6 million customers (IMF 2014 estimations).  The foreign labor force in GCC is nearly half of population (47%), and it is estimated that $ 93.4 Billion of remittance are remitted from GCC in 2013. 2013 Number of Foreign Workers Outward Remittances Million % of Populatio n Reported ($ B) Estimated ($B) Share of GDP Bahrain0.754%2.22.67.8% Kuwait2.469%15.211.56.5% Oman1.128%9.14.86.0% Qatar1.984%11.310.55.1% Saudi Arabia9.131%3534.54.6% UAE885%17.929.67.4% Total23.247%90.793.45.7% USA45.814%53.6124.80.7% Source: World Bank, IMF, Arab Monetary Fund

6. 6  The economic activity in GCC countries comprises 2.6 million enterprises.  There are 707 listed companies in the GCC Countries’ stock exchanges, with market capitalization equals $ 1.08 trillion (June- 2015) Source: Labor Force and Planning ministries in GCC Countries. Data of Qatar for 2010. Source: GCC Countries’ Stock Exchanges.

7. 7 2- Doing Business Indicators South Korea as a developed Market is at 26 in Global Competitiveness Index Example: Competitiveness Index for GCC Countries compared with Arab Countries Source: World Economic Forum, The Global Competitiveness Report 2014 - 2015  GCC Region comes before many developed markets in total competitiveness index and before many emerging markets in ease of doing business index.  The economic freedom index issued by Heritage Foundation and Wall Street Journal evaluates the GCC countries as moderately or mostly free.

8. 8 2- Credit Ratings CountryS&PMoody’sFitch Saudi ArabiaAA-Aa3AA U.A.EAAAa2AA KuwaitAAAa2AA QatarAAAa2AA OmanA-A1 BahrainBBB-Baa3BBB- Source: organizations of standard & Poor’s, Moody’s, and Fitch ratings Most GCC countries’ credit rating is categorized in the high grade.

9. 9 3- Investment Incentives GCC Countries have started to put FDI as a strategic target. In order to ease business:  GCC countries has amended the commercial law and the process of doing Business.  Suspended the offset program to encourage FDI ( Kuwait)

10. 10  Up to 100% ownership in some sectors or areas.  No expropriation.  Very Low income and corporate tax in most GCC Countries.  Free Exchange of earnings at a pegged exchange rate without a black or parallel market.

11. 11  Customs Duties free (total or partial exemptions in Kuwait and Saudi Arabia in case of not- existence of local substitutes).  Benefits under Bilateral Investment Treaties and Double Taxation Treaties.  GCCs Countries are signatories to international center for settlement of investment disputes and New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

12. 12 Special Investment Incentives Saudi Arabia: - Registration within 30 days. - Competitive Industrial Utility rate. - Loans from SIDF and other local and regional institutions. - Open the Retail & Whole Markets for full foreign ownership United Arab Emirates: - 40 Free Zones with fully freedom, subsidies and excellent Facilities Qatar: - Qatar Financial Center with 100% ownership. - Science and Technology Park. - Competitive Prices for utilities. Oman: - One Stop Shop. - Free Trade Zones – Duqum, Salalah, and Sohar. - Export Credit Insurance and Low interest rate. Kuwait: - Competitive Prices for utilities. - New PPP law in 2014. - Suspending the Offest Program to encourage FDI. - Plans to establish three economic zones. - Plan for establishing one stop shop enables investors to register in 30 days. Bahrain: - International investment park - 100% ownership up till land - No performance needed or Technology transfer or localization of R&D Source: Department of state. Investment Climate Statement 2015. U.S.A

13. 13  Solid economic fundamentals are reflected in:7% of world proven crude oil, Sovereign Wealth fund with $ 592 billion, GDP with $ 172 billion, and GDP per capita $ 43 thousands.  Political stability through profound democratic system.  Honest intent to diversify the economy to be driven by the private sector.  fair judiciary system.  Advanced banking sector.  Experienced private sector.  Strategic location as a gate for North Gulf region and a neighbor for three major countries-Saudi Arabia, Iraq, and Iran.  Modern Infrastructure.

14. 14 4- Economic Diversification  The major risk for the international investors is the question: what lies beyond the natural resources funded states of GCCs? What is the future of their diversification?  The oil prices are very low, and the expectations are to be low for a long time.  So the improvement in the business environment will be higher and there will be realistic attempts to achieve the diversification.

15. 15  GCC countries set plans to diversify its economy.  These plans include large projects and events that promote sectors such as Tourism, oil & Downstream industries, Health & Education, Logistics & transport, and Construction  Examples:  Kuwait Development plan. ($ 113 Billion)  King Abdullah Economic City. ($100 Billion)  Qatar National Vision 2030. ($86 Billion)  FIFA world cup 2022. ($26 Billion)  World Expo 2020. ($8 Billion)

16. 16 The following sectors offer opportunities for investment in GCC countries:  Oil & Mineral downstream industries.  Tourism and its related industries.  Health and Education.  Logistics and Transport.  Building and Sustainable Construction.

17. 17 Oil & Mineral downstream industries.  GCC region is a global center for the production of chemical and petrochemicals, with returns account for $ 97.3 billion in 2014, with 12% annual return.  GCC produces 10% of world primary aluminum, 70% of which is exported, and 30% is used by downstream industries, half exported.  GCC large companies started to produce specialty chemicals.  Investment opportunities. Flexible packaging. Consumer products. Automotive industries. Electronics.

18. 18 Tourism Sector:  Nearly 29 Million International tourists arrived to GCC countries in 2013, and The growth rate between 2010-2013 was 28%.  GCC governments will spend $ 380 billion up till 2018 for projects encouraging tourism.  Potential Investment opportunities are: Development the waterfront for some cities. Investment in the hospitality and tourism education. Upgrading heritage tourist places. Source: UNWTO statistics 2015 U.A.E include Dubai only.

19. 19 Health Care Sector:  Since 2010 the return is around 14% annually and the healthcare industry will be $ 69.4 billion by 2018.  The sector is driven by high disposable income, increased life expectancy, large numbers of expatriates not-treated by public healthcare services, low physician and bed density, expectations to increase the rates of diabetes and obesity which currently form the highest worldwide rates.  Investment opportunities are: PPP with governments. Centers of excellence that provide exceptional patient care. E-health, integrating technology with health services such as enabling online consultation, swift online pharmacy services, and smartphone applications. Centers for enhancing the conventional beauty and mitigating the effects of aging. Wellness centers to treat the physical and mental wellbeing through the conventional or alternative treatments.

20. 20 Education Sector:  The sector is driven by population growth, increasing of expatriates, the focus on high-quality education in the society, a growing spending propensity, additional momentum from governments for producing industry-ready graduates.  The number of students is expected to grow at 3% annually to reach 13.7 million in 2020.  Enrolments at private institutions increased and attracted students from the MENA region.  Dubai has become the third most popular destination, following France and the US, among students from the Middle East.  Investment Opportunities: The M&A activity. Development of high-achieving “smart” schools. The segments of K-12 and higher education which adapts to labor requirements The new and promising industry-specific, niche sectors such as vocational training, finishing schools, child-skill enhancement, and e- learning.

21. 21 Logistics and Transport :  According Industry reports, the Gulf region awarded US$86 billion worth of infrastructure projects in 2014, 78 per cent over 2013.  Several Gulf countries have hosted prestigious conferences. For example, the hosting of the Federation of National Associations of Shipbrokers and Agents (FONSBA).  Examples for projects in GCC: the logistics village in Hamad International Airport, Qatar, Mubarak Al Kabeer port in Kuwait and the recently published Oman’s Logistics Strategy 2020 document which demonstrates the seriousness with encouragement of the logistics sector to prosper by the government.  Investment Opportunities: Materials handling services. Warehousing equipment. Racking and shelving systems. Repair and Maintenance.

22. 22 Building and Sustainable Construction :  By 2017 the construction market will be $ 104.7 billion annually.  The focus on the green Building, especially the energy efficient and water conserved.  There are initiatives such as: Saudi Green Building Forum, Abu Dhabi Estidama initiative, Kuwait green building council, and Qatar global sustainability assessment.  Investment opportunities. Products which can apply to all types of building construction and have the capability to deliver the specific types of performance gains within the built environment that are targets in green building. Examples of these products: heating, ventilation, air conditioning and refrigeration (HVACR), lighting, plumbing products, insulation, wood products, doors and windows, and glass.

23. 23 THANK YOU